For those of us who remember AMD as the alternative to Intel in our desktops, or as the also-ran to Intel in servers, it’s time to think of the new AMD. Like a Beyonce dumping Destiny’s Child, the chipmaker is ditching its sole reliance on x86 and embracing new architectures such as graphics processors and ARM-based cores. And scoring the processor inside the latest generation PlayStation console is the perfect example of the new AMD.

AMD has built a custom chip for the PS4 that combines a graphics processor with a CPU core creating what AMD calls an APU, or accelerated processing unit. AMD calls these APUs, and it has been working toward a win in this area since it purchased GPU firm ATI all the way back in 2006. The PlayStation 4 is quite a win, with a few hundred million of the consoles sold in its history.

The PS4 chip is also the first public design win out of a new group inside AMD, the Embedded and Custom Semi group, which AMD estimates will generate a fifth of its sales in 2013. That group will be responsible for building out custom chips for clients that will sell at massive volumes.

In the case of the PS4, AMD combined its next generation 8-core Jaguar CPU with its next generation GPU. Another way to look at this is to realize that Sony’s PS4 isn’t just limiting the graphics processor to graphics. That chip is likely handling elements of the compute as well.

The PS4 chip is the first chip for the Embedded and Custom Semi group, but not the first custom effort for AMD. It also made custom versions of graphics processors for the WiiU and the Xbox consoles. But AMD hopes the business will continue to grow, especially as AMD looks beyond its traditional PC market. Not only has it put more focus on graphics and its APU strategy, but it also last year took a license for the ARM architecture and said it plans to use the upcoming 64-bit ARM architecture to build chips for servers.

John Taylor, the VP of product marketing with AMD, said he can’t share the exact volumes that would entice AMD to design a custom chip, and upon further questioning it appears that the number of chips may not be the sole deciding factor.

When asked about combining GPUs or even ARM cores in the server business for example, he said, “Well you know that in the server market the chips generally have higher average selling prices than those in the consumer space, so it may not necessarily be that we will demand a 1 million unit run to build these chips. It will be a business decision.”

Yet Taylor’s hypothetical example of a good customer for the custom semi business was a smart TV manufacturer, one that had already designed portions of a chip that it wanted to combine with computing and/or graphics processors from AMD. However, he acknowledged that AMD now has several architectural options and plans to build a business combining those options for customers outside of AMD’s traditional lines of business.

Such a commitment isn’t for the faint of heart. The development of a core can take years of forethought, while the combination of cores onto a single system on chip, such as the one offered in the PS4, can take up to a year. As the web and application side of the technology world speeds up, chip firms are still stuck planning for a future that is years out and hoping they can get it right.